From the Birth of American Democracy
Through the Birth of Corporate Personhood

excerpted from the book

Unequal Protection

The Rise of Corporate Dominance
and the Theft of Human Rights

by Thom Hartmann

Rodale Press, 2002, paper

p47
A business can operate at a profit, a break-even, or a loss. If
the business is a sole proprietorship or partnership (owned by
one or a few people), and it loses more money than its assets
are worth, the owners and investors are personally responsible
for the debts, which may exceed the amount they originally invested.
A small business owner could put up $10,000 of her own money to
start a company, have it fail with $50,000 in debts, and be personally
responsible for paying off that debt out of her own pocket.

But let's say you invest $10,000 in a
limited liability corporation, and the corporation runs up $50,000
in debts, and defaults on those debts. You would lose only your
initial $10,000 investment. The remaining $40,000 wouldn't be
your concern because the amount of your investment is the "limit
of your liability" even if the corporation goes bankrupt
or defaults in any other way.

Who foots the bill? The creditors-the
people to whom the corporation owes money. The company took the
goods or services from them, didn't pay, and leaves them with
the bill, exactly as if you had put in a week's work and not gotten
paid for it.

And if the corporation declares bankruptcy
and dissolves itself, there is nobody the creditors can go after.
That's the main thing that makes a corporation a corporation,
and it's why in England the abbreviation for a corporation isn't
"Inc." as in the United States. It's "Ltd.,"
which stands for limited liability corporation. (also used in
the United States and other nations.)

If you were a stockholder in a corporation
that went under, it wouldn't even be reflected on your personal
credit rating (unless you had volunteered to personally guarantee
the corporation's debt). Your liability is limited to however
much you invested.

Moreover, a corporation can outlast its
founders. If you started a one-man glassblowing business, for
example, when you die or can't work any more, the income stops.
But a glassblowing corporation is an entity unto itself, and can
continue on with new glassblowers and managers after the founders
move on. The implication, of course, is that a corporation can
pay L-profits as a dividend to its shareholders for centuries,
theoretically forever.

p72
... on October 28, 1813, Jefferson would write to John Adams about
their earlier disagreements over whether a government should be
run by the wealthy and powerful few (the pseudo-aristoi), or a
group of the most wise and capable people (the "natural aristocracy"),
elected from the larger class of all Americans, including working
people.

... Adams and the Federalists were wary
of the common person (who Adams referred to as "the rabble"),
and many subscribed to the Calvinist notion that wealth was a
sign of certification or blessing from above and a certain minimum
level of morality. Since the Senate of the United States was elected
by the state legislatures (not by the voters themselves, until
1913) and entirely made up of wealthy men, it was mostly on the
Federalist side. Jefferson and the Democratic Republicans disagreed
strongly with the notion of a Senate made up of the wealthy and
powerful.

... Jefferson's vision of a more egalitarian
Senate-directly elected by the people instead of by state legislators-finally
became law in 1913 with the passage of the Seventeenth Amendment,
promoted by the Populist Movement and passed on a wave of public
disgust with the corruption of the political process by giant
corporations.

Almost all of his visions for a Bill of
Rights-all except "freedom from monopolies in commerce"
and his concern about a permanent army-were incorporated into
the actual Bill of Rights, which James Madison shepherded through
Congress and was ratified December 15, 1791.

But the Federalists fought hard to keep
"freedom from monopolies" out of the Constitution. And
they won. The result was a boom for very large businesses in America
in the 19th and 20th centuries ...

p74
... on the eve of his becoming Chief Justice of Wisconsin's Supreme
Court, Edward G. Ryan said ominously in his 1873 address to the
graduating class of the University of Wisconsin Law School, "[There]
is looming up a new and dark power... the enterprises of the country
are aggregating vast corporate combinations of unexampled capital,
boldly marching, not for economical conquests only, but for political
power . . . . The question will arise and arise in your day, though
perhaps not fully in mine, which shall rule-wealth or man [sic];
which shall lead-money or intellect; who shall fill public stations-educated
and patriotic freemen, or the feudal serfs of corporate capital
...

p76
It's only when a group of people get together and put capital
(cash) at risk and want to seek from the government legal limits
on their liability and to legally limit their possible losses,
that a corporate form becomes necessary In exchange for these
limitations on liability, governments demand certain responsibilities
from corporations. The oldest historic one was that corporations
"operate in the public interest" or "to the public
benefit." After all, if the people, through their elected
representatives, are going to authorize a legal limitation of
liability for a group of people engaged in the game of business,
it's quite reasonable to ask that the game be played in a way
that throws off some benefit to the government's citizens, or
at least doesn't operate counter to the public welfare.

But the bigger they got, the less America's
corporations (or their investors) seemed to like regulation, and
the more they started to seek more flexibility. Railroads, in
particular, were finding themselves increasingly subject to local
and state taxes, regulations, and tariff and passenger fare limits,
which were specifically designed to keep prices affordable for
the people and to limit the profits of the railroads to what the
people's governments considered fair for state-authorized monopolies.

So, starting in the 1870s, the railroads
and their owners began directing massive legal attacks against
the power of governments to regulate them.

p82
... Madison knew exactly where he stood. In 1817, he wrote, "There
is an evil which ought to be guarded against in the indefinite
accumulation of property from the capacity of holding it in perpetuity
by... corporations. The power of all corporations ought to be
limited in this respect. The L growing wealth acquired by them
never fails to be a source of abuses."

And in a letter to James K. Paulding on
March 10, 1817, Madison made absolutely explicit a lifetime of
thought on the matter. "Incorporated Companies," he
wrote, "with proper limitations and guards, may in particular
cases, be useful, but they are at best a necessary evil only.
Monopolies and perpetuities are objects of just abhorrence. The
former are unjust to the existing, the latter usurpations on the
rights of future generations. Is it not strange that the Law which
will not permit an individual to bequeath his property to the
descendants of his own loins for more than a short and strictly
defined term, should authorize an associated few, to entail perpetual
and indefeasible appropriations. .

" Because the Founders of America
tended to agree with Thomas Hobbes that corporations had the potential
to be "worms in the body politic," governments at all
levels-municipal, county, state, and federal-had laws carefully
circumscribing the behaviors of corporations.

After the American Revolution, it was
a basic principle of democratic government to protect the people
it represented from unrestrained corporate power. Thus, during
the first few decades of the existence of the new United States
of America, there were only a handful of corporations, most formed
for international trade or banking.

Seeing in even these few corporations
the possible reincarnation of an East India Company type of corporate
plutocracy, in 1816 Thomas Jefferson wrote, "I hope we shall
crush in its birth the aristocracy-of our moneyed corporations
which dare already to challenge our government in a trial of strength,
and bid defiance to the laws of our country."

Those "moneyed corporations"
grew in power and influence through Jefferson's lifetime and after
his death in 1826.

p87
The Civil War was a huge boom for the largest corporations in
America because government spending exploded for just about every
conceivable commodity that was needed by the troops. By the time
the war was over, several corporations that supplied war materials
and transportation, particularly the railroads, were operating
in multi-state and monopolistic ways that were raising alarm bells
among citizens and in legislatures across the nation.

On July 1, 1862, President Lincoln signed
into law under "military necessity" the Pacific Railway
Bill, which granted to the Union Pacific and the Central Pacific
Railroads ten sections of land along a right-of-way from Iowa
to San Francisco. The bill also included government loans for
building rail lines of $16,000 per mile for level ground, $32,000
per mile for railways crossing deserts, and $48,000 per mile for
rails crossing mountains. The national railroad-building campaign
became a frenzied activity; sloshing with money and manpower.

But the money was everywhere, and it spawned
rampant corruption. As Attorney General Edward Bates wrote in
his diary on March 9, 1863, "The demoralizing effect of this
civil war is plainly visible in every department of life. The
abuse of official powers and the thirst for dishonest gain are
now so common that they cease to shock."

In his classic biography of Lincoln, Carl
Sandburg wrote, "A procession of mouthpieces and fixers twined
in and out of Lincoln's office from week to week. .

Sandburg notes that General James Grant
Wilson wrote to Lincoln, "every contractor has to be watched"
because "some of the most competent and most energetic contractors
were the most dishonest, [and] could not be content with a fair
profit." He quotes Blackwood Magazine of England as noting,
"A great war always creates more scoundrels than it kills."

Between just June 1863 and June 1864,
the War Department paid out more than $250,000,000. In the last
year of the war, on November 21, 1864, Lincoln looked back on
his actions and the growing power of the now-unleashed and enriched
corporations, and wrote the following thoughtful letter to his
friend Colonel William F Elkins.

"We may congratulate ourselves that
this cruel war is nearing its end. It has cost a vast amount of
treasure and blood. The best blood of the flower of American youth
has been freely offered upon our country's altar that the nation
might live. It has indeed been a trying hour for the Republic;
but I see in the near future a crisis approaching that unnerves
me and causes me to tremble for the safety of my country.

"As a result of the war, corporations
have been enthroned and an era of corruption in high places will
follow, and the money power of the country will endeavor to prolong
its reign by working upon the prejudices of the

people until all wealth is aggregated
in a few hands and the Republic is destroyed. I feel at this moment
more anxiety than ever before, even in the midst of war. God grant
that my suspicions may prove groundless."

p91
Acting on behalf of the railroad barons, attorneys for the railroads
repeatedly filed suits against local and state governments that
had passed laws regulating railroad corporations. The main tool
the railroad's lawyers tried to use was the fact that corporations
had-historically been referred to under law not as corporations
but as artificial persons. Based on this, they argued, corporations
should be considered persons under the free-the-slaves Fourteenth
Amendment and enjoy the protections of the Constitution just like
living, breathing, human persons.

Using this argument for their base, the
railroads repeatedly sued various states, counties, and towns
claiming that they shouldn't have to pay local taxes because different
railroad properties were taxed in different ways in different
places and this constituted the creation of different "classes
of persons" and was thus illegal discrimination. For almost
20 years, these arguments did not succeed.

p95
WILLIAM JENNINGS BRYAN, IN HIS ADDRESS TO THE OHIO 1912 CONSTITUTIONAL
CONVENTION

The first thing to understand is the difference
between the natural person and the fictitious person called a
corporation. They differ in the purpose for which they are created,
in the strength which they possess, and in the restraints under
which they act.

Man is the handiwork of God and was placed
upon earth to carry out a Divine purpose; the corporation is the
handiwork of man and created to carry out a money-making policy.

There is comparatively little difference
in the strength of men; a corporation may be one hundred, one
thousand, or even one million times stronger than the average
man. Man acts under the restraints of conscience, and is influenced
also by a belief in a future life. A corporation has no soul and
cares nothing about the hereafter.

p98
In the decade leading up to this May day in 1886, the railroads
had lost every Supreme Court case that they had brought seeking
Fourteenth Amendment rights. I've searched dozens of histories
of the time, representing a wide variety of viewpoints and opinions,
but only two have made a serious attempt to answer the question
of what happened that fateful day-and their theories clash.

No laws were passed by Congress granting
that corporations should be treated the same under the Constitution
as living, breathing human beings, and none have been passed since
then. It was not a concept drawn from older English law. No court
decisions, state or federal, held that corporations were persons
instead of artificial persons. The Supreme Court did not rule,
in this case or any case, on the issue of corporate personhood.

In fact, to this day there has been no
Supreme Court ruling that could explain why a corporation-with
its ability to continue operating forever legal agreement that
can't be put in jail and doesn't need fresh water to drink or
clean air to breathe-should be granted the same constitutional
rights our Founders explicitly fought for, died for, and granted
to the very mortal human beings who are citizens of the United
States to protect them against the perils of imprisonment and
suppression they had experienced under a despot king.

But something happened in 1886, even though
nobody to this day knows exactly what or why.

p98
In the decade leading up to this May day in 1886, the railroads
had lost every Supreme Court case that they had brought seeking
Fourteenth Amendment rights. I've searched dozens of histories
of the time, representing a wide variety of viewpoints and opinions,
but only two have made a serious attempt to answer the question
of what happened that fateful day-and their theories clash.

No laws were passed by Congress granting
that corporations should be treated the same under the Constitution
as living, breathing human beings, and none have been passed since
then. It was not a concept drawn from older English law. No court
decisions, state or federal, held that corporations were persons
instead of artificial persons. The Supreme Court did not rule,
in this case or any case, on the issue of corporate personhood.

In fact, to this day there has been no
Supreme Court ruling that could explain why a corporation-with
its ability to continue operating forever legal agreement that
can't be put in jail and doesn't need fresh water to drink or
clean air to breathe-should be granted the same constitutional
rights_ Our Founders explicitly fought for, died for, and granted
to the very mortal human beings who are citizens of the United
States to protect them against the perils of imprisonment and
suppression they had experienced under a despot king.

But something happened in 1886, even though
nobody to this day knows exactly what or why...

104
According to the record left to us, here's what seems to have
happened. For reasons that were never recorded, moments before
the Supreme Court was to render its decision in the now-infamous
Santa Clara County v. Southern Pacific Railroad Company case,
Chief Justice Waite turned his attention to Delmas and the other
attorneys present.

As railroad attorney Sanderson and his
two colleagues watched, Waite told Delmas and his two colleagues,
"The court does not wish to hear argument on the question
whether the provision in the Fourteenth Amendment to the Constitution,
which forbids a state to deny to any person within its jurisdiction
the equal protection of the laws, applies to these corporations.
We are of the opinion that it does." He then turned to Justice
Harlan, who delivered the Court's opinion in the case.

In the written record of the case, the
court recorder noted, "The defendant corporations are persons
within the intent of the clause in section 1 of the Fourteenth
Amendment to the Constitution of the United States, which forbids
a State to deny to any person within its jurisdiction the equal
protection of the laws."

This written statement, that corporations
were persons rather than artificial persons, with an equal footing
under the Bill of Rights as humans, was not a formal ruling of
the court, but was reportedly a simple statement by its Chief
Justice, recorded by the court recorder.

* There was no Supreme Court decision
to the effect that corporations are equal to natural persons and
not artificial persons.

* There were no opinions issued to that
effect, and therefore no dissenting opinions on this immensely
important constitutional issue.

The written record, as excerpted above,
simply assumed corporate personhood without any explanation why.
The only explanation provided was the court recorders reference
to something he says Waite said, which essentially says, "that's
just our opinion" without providing legal argument.

In these two sentences (according to the
conventional wisdom), Waite weakened the kind of democratic republic
the original authors of the Constitution had envisioned, and set
the stage for the future worldwide damage of our environmental,
governmental, and cultural commons. The plutocracy that had arisen
with the East India Company in 1600 and been fought back by America's
Founders, had gained a tool that was to allow them, in the coming
decades, to once again gain control of most of North America and
then the world.

Ironically, of the 307 Fourteenth Amendment
cases brought before the Supreme Court in the years between Waite's
proclamation and 1910, only 19 dealt with African Americans: 288
were suits brought by corporations seeking the rights of natural
persons.

Supreme Court Justice Hugo Black pointed
out 50 years later, "I do not believe the word 'person' in
the Fourteenth Amendment includes corporations .... Neither the
history nor the language of the Fourteenth Amendment justifies
the belief that corporations are included within its protection.

Sixty years later, Supreme Court Justice
William 0. Douglas made the same point, writing that, "There
was no history, logic or reason given to support that view [that
corporations are legally 'persons']."

There was no change in legislation, and
President Grover Cleveland had not issued a proclamation that
corporations should be considered the same as natural persons.
The U. S. Constitution does not even contain the word "corporation,"
and has never been amended to contain it because the Founders
wanted corporations to be regulated as close to home as possible,
by the states, so they could be kept on a short leash-presumably
so nothing like the East India Company would ever again arise
to threaten the entrepreneurs of America.

But as a result of this case, for the
past 1 00-plus years corporate lawyers and politicians have claimed
that Chief Justice Waite turned the law on its de and reinvented
America's social hierarchy.

p120
While corporations can live forever, exist in several different
places at the same time, change their identities at will, and
even chop off parts of themselves or sprout new parts, the Chief
Justice of the U. S. Supreme Court, according to its reporter,
had said that they are "persons" under the Constitution,
with constitutional rights and protections as accorded to humans.
Once given this key, corporations began to assert the powers that
came from their newfound rights.

* Claiming the First Amendment right of
all "persons" to free speech, corporate lawsuits against
the government successfully struck down laws that prevented them
from lobbying or giving money to politicians and political candidates.

* Earlier laws (such as the Wisconsin
laws noted in chapter 5) had said that a corporation had to open
all its records and facilities to our governments as a condition
of being chartered. But now, claiming the

Fourth Amendment right of privacy, corporate
lawsuits successfully struck down such laws. In later years, they
also sued to block OSHA laws allowing for surprise safety inspections
of the workplace and stopped EPA inspections of chemical factories.

* Claiming the Fourteenth Amendment protection
against discrimination (granting persons equal protection), the
J. C. Penney chain store successfully sued the state of Florida,
ending a law designed to help small, local business by charging
chain stores a higher business license fee than locally owned
stores.

On December 3, 1888, President Grover
Cleveland and delivered his annual address to Congress. Apparently,
the President had taken notice of the Santa Clara County decision,
its politics, and its consequences, for he said in his speech
to the nation, delivered before a joint session of Congress, "As
we view the achievements of aggregated capital, we discover the
existence of trusts, combinations, and monopolies, while the citizen
is struggling far in the rear or is trampled to death beneath
an iron heel. Corporations, which should be the carefully restrained
creatures of the law and the servants of the people, are fast
becoming the people's masters."

p131
In 1906, President Theodore Roosevelt proposed campaign finance
reform legislation in his annual address to Congress on December
3, saying, "I again recommend a law prohibiting all corporations
from contributing to the campaign expenses of any party ... .Let
individuals contribute as they desire; but let us prohibit in
effective fashion all corporations from making contributions for
any political purpose, directly or indirectly."

Teddy Roosevelt made another run at trying
to rein in the new corporate "persons" a year later,
when in December 1907 he addressed Congress and said, "The
fortunes amassed through corporate organization are now so large,
and vest such power in those that wield them, as to make it a
matter of necessity to give to the sovereign-that is, to the Government,
which represents the people as a whole-some effective power of
supervision over their corporate use. In order to ensure a healthy
social and industrial life, every big corporation should be held
responsible by, and be accountable to, some sovereign strong enough
to control its conduct."

The result was the Tillman Act of 1907,
the first law to bar (in a very limited fashion) corporate money
from political campaigns. The Republican Roosevelt followed this
by building a popular reputation as "the trustbuster"
through his aggressive enforcement of the Sherman Anti-Trust act,
using it to break up more than 40 large corporations during his
presidency.

From 1909 to 1913, President Taft continued
Teddy Roosevelt's tradition by further breaking up John D. Rockefeller's
Standard Oil Trust into 33 separate companies, and breaking up
American Tobacco. Working people loved him for it, as did entrepreneurs
who again had opportunities in the newly freed marketplace.

But in the first year of the Wilson administration,
the corporations reacted by trying to use the same law-the Sherman
Anti-Trust Act-to get unions outlawed. They essentially argued
that if it was illegal for corporate persons to conspire or form
monopolies for their own benefit, then it should be equally illegal
for human persons to do the same in the form of unions.

When corporations started using the Sherman
Act against unions, going against the spirit of an act that was
passed to protect the average person from excessive corporate
power, the U. S. Congress passed the Clayton Anti-Trust Act of
1914 at the urging of President Woodrow Wilson. It specifically
outlawed tying together multiple products, price discrimination,
corporate mergers, and interlocking boards of directors. The Clayton
Act also mandated the creation of the Federal Trade Commission
(FTC). The FTC's original job was to control corporate wrongdoing,
and it still carries that mission.

Through the Roaring Twenties, little was
done to enforce these various acts by the corporate-friendly administrations
of Calvin Coolidge ("the business of America is business")
and Herbert Hoover. Seven years after the onset of the Great Depression,
however Franklin D. Roosevelt again began to enforce the Sherman
Act, and it was pretty much the law of the land from that time
until Ronald Reagan was elected President.

p134
As we've seen, throughout most of the 18th and 19th centuries,
states were moving to restrict corporate activities by placing
limits on the term, activities, and powers a corporation could
take in their charter of incorporation. When Ohio broke up the
Standard Oil Trust in 1892, Rockefeller and other corporate giants
with similar problems began looking for states where they could
recharter their corporations without all of the restrictions that
Ohio and most other states had placed on them.

New Jersey was the first state to engage
in what was then called chartermongering-changing its corporate
charter rules to satisfy the desires of the nation's largest businesses.
In 1875, its legislature abolished maximum capitalization limits,
and in 1888, the New Jersey legislature took a huge and dramatic
step by authorizing-for the first time in the history of the United
States-companies to hold stock in other companies.

In 1912, New Jersey Governor Woodrow Wilson
was alarmed by the behavior of corporations in his state, and
"pressed through changes [that took effect in 1913] intended
to make New Jersey's corporations less favorable to concentrated
financial power."

As New Jersey began to pull back from
chartermongering, Delaware stepped into the fray, by passing in
1915 laws similar to but even more liberal for corporations than
New Jersey's. Delaware continued that liberal stance to corporations,
and thus, as the state of Delaware says today, "More than
308,000 companies are incorporated in Delaware including 60 percent
of the Fortune 500 and 50 percent of the companies listed on the
New York Stock Exchange. The Delaware Corporation Law, the Court
of Chancery, and the customer service-oriented staff at the Division
of Corporations are all sound reasons why Delaware leads the nation
as a major corporate domicile."

As New Jersey and then Delaware threw
out old restrictions on corporate behavior, allowing corporations
to have interlocking boards, to live forever, to define themselves
for "any legal purpose," to own stock in other corporations,
and so on, corporations began to move both their corporate charters
and, in some cases, their headquarters to the chartermongering
states. By 1900, trusts for everything from ribbons to bread to
cement to alcohol had moved to Delaware or New Jersey, leaving
26 corporate trusts controlling, from those states, more than
80 percent of production in their markets.

p135
Between 1900 and 1970, in order to remain competitive, nearly
all U. states rolled back their state constitutions or laws to
make it easier for large corporations to do business in their
states without having to answer to the citizens of the state for
what they do or how they do it. At the same time, America's largest
corporations-including the burgeoning defense industry began to
look overseas and see a whole new frontier of minerals and wood
and raw materials owned by poor or powerless people, and great
new places to build factories because the people would work for
extremely low wages compared to workers in the United States who
were trying to maintain a middle-class lifestyle. Not to mention
all those potential customers for their products.

The race to the bottom of costs, regulation,
taxes, and prices was underway, and would bring with it a race
to the top in wealth for a few hundred multinational corporations
and the politicians and media commentators they supported.

And soon that race would turn worldwide.

p139
Congress was reluctant to accept all the provisions of the Bretton
Woods Agreement for an important reason international treaties
almost always supersede national laws. If the United States signed
a treaty with, for example, Saudi Arabia that said, "In exchange
for a cheap oil deal, all American gas stations must display a
picture of the King of Saudi Arabia out front," then that
would become the binding law of the United States from coast to
coast, even though neither Congress nor the American citizens
had ever voted on it. If you didn't put a picture of the king
on your gas station, you could be subject to fines or imprisonment.

As former Secretary of State John Foster
Dulles said on April 11, 1952, before a Louisville, Kentucky,
American Bar Association meeting, "Treaties make international
law and also they make domestic law. Under our Constitution, treaties
become the supreme law of the land. . .

The language that provides for this is
in the Constitution. Clause 2 of Article VI of the U S Constitution
says, "This Constitution and the laws of the United States
which shall be made in pursuance thereof, and all treaties made,
or which shall be made, under the authority of the United States,
shall be the supreme law of the land; and the judges in every
state shall be bound thereby, anything in the constitution or
laws of any state to the contrary notwithstanding." In other
words, treaties and some agreements can supersede federal, state,
or local law, or court decisions, with the single possible exception
of constitutionally defined rights.

That's why the Founders were so wary of
treaties. Knowing how draconian this treaty power was, the framers
of the Constitution made it difficult for treaties to be ratified,
by requiring a full two-thirds vote of the Senate instead of just
a simple majority as with normal legislation ...

p140
The Reagan administration ushered in an era of mergers and acquisitions
that in many ways resembled the trusts of the late 1800s and the
192 Os. Corporations were well-represented in the corridors of
power, and their power to combine into market behemoths was again
blessed by an American president.

... In addition to merging into giants
that could keep out small competitors and largely control entire
marketplaces, multinational corporations wanted the government
to ease up on restrictions on their activities overseas. The U.
S. Constitution specifically states that the president "shall
have Power, by and with the Advice and Consent of the Senate,
to make Treaties, provided two thirds of the Senators present
concur."

That two-thirds-of-the-Senators requirement,
however, made for a slow and contentious process, particularly
when it came to issues that could affect American jobs. During
the Ford era, the administration proposed that the Senate go around
the Constitution and turn their power to negotiate and define
the details of treaties over to the sole person of the president.
They did this by using an obscure provision of the 1974 Trade
Act that gave the president the right to negotiate trade treaties
and then let him submit them to Congress for a straight up-or-down
vote with no amendments allowed. Under these rules, debate is
limited to 45 days in committee and 15 days on the floor of the
House or Senate.

Called fast-track authority, each president
from Richard Nixon to the first George Bush pushed to get this
authority for himself. Bush pushed for ratification of the GAIT
agreement, but was unsuccessful.

But Bill Clinton, in the final days of
his first 4-year term, joined with Senate leader Bob Dole to use
political pressure, fast-track procedures, and careful timing
(just before the Christmas recess) to bring the GATT agreement
to pass.

Thus, after much lobbying and giving out
of substantial campaign contributions by multinational business
interests and a Senate vote to invoke cloture-a procedure that
allowed only 30 hours of Congressional debate and forbade amendments-the
final parts of the Bretton Woods Agreement and its offspring were
ratified in November 1994, just as Congress was in a hurry to
head home for the holidays. Most of the members of Congress didn't
read the document they voted on, but it became the law of the
land in any case. One month later, GAIT gave birth to the U. N.
World Trade Organization.

p141
Of course, the legislation had been around for a long time, but
the record at the time, based on statements by at least one member
of Congress, is that only one senator, Hank Brown of Colorado,
actually read the agreement. He was a supporter of the trade agreements
when he first decided to read their nearly 30,000 pages. By the
time Brown finished reading it, however, he had changed his mind.
On December 9, 1994, he wrote, "The GAIT, which cleared Congress
December 1, creates a form of world government limited to trade
matters without fair representation for the U. S., and an international
court system without due process. The details of this new government
called the World Trade Organization (WTO) are buried in the thousands
of pages of the Agreement.

"Fifty new committees, boards, panels
and organizations will be created by the WTO making it an international
bureaucracy of unprecedented size. The United States could be
responsible for up to 23 percent of the cost of running the WTO,
yet will have less than 1 percent of the control of how the money
is spent. The WTO courts' (Dispute Settlement Body Panels) proceedings
will be secret and decisions will be rendered anonymously by unaccountable
bureaucrats. No conflict of interest rules exist to ensure impartial
panelists .... Unfortunately, efforts which I supported to block
the passage of the GATT implementing legislation (H. R. 5110/S.
2467) failed. The final measure, which I voted against, passed
the Senate by a margin vote of 76-24." Senator Brown resigned
after his one term and became a director of a multibillion-dollar
corporation. Both the World Bank and the WTO were now reality.

p145
Since 1995, virtually every area of consumer and industrial product
has been affected by the new WTO or NAFTA regulations, which have
the force of law in those countries where they're ratified. Thousands
of U. S., Canadian, European, and other safety and consumer protection
laws and regulations have been overturned or, through a process
called harmonization, weakened to the point of irrelevance.

Harmonizing is a term that refers to bringing
the laws of different nations into alignment. The effect is usually
to force all nations to accept the most corporate-friendly and
least restrictive laws of any of the member nations. Anti-globalization
folks have referred to the process as leveling all nations to
the standards of the lowest common denominator. Supporters point
out that harmonization increases profits for corporations who
participate, and assert that has a positive social benefit.

These trade agreements use tribunals and
Dispute Resolution Panels (DRPs) to review complaints. Their largest
effect has been to put corporations on a level ground with national
governments. Corporations can sue countries under NAFTA, and many
have successfully won tens of millions of dollars for "unfair
restraint of trade" because of laws designed to protect the
environments or workers. So far, no countries have sued a corporation.

If a DRP decides a law is obstructing
corporations from their right to engage in free trade across national
borders, then fines are assessed unless all of the WTO members
vote within 60 days to dispute the DRP's decision. As of this
writing, this has rarely happened. If a nation continues to try
to enforce laws ruled antitrade by a DRP, it suffers huge ongoing
fines, must pay reparations, and can be branded a renegade nation
and suffer massive trade penalties.

Thus, the DRPs are among the most powerful
groups in the world they can pressure governments to repeal or
change laws that were legally passed by the people of those nations,
and enforce their judgments with penalties, sanctions, and fines.
Even with all this worldwide power, the DRPs are not democratic,
not elected by the people, not controllable by the voters of any
nation, and they don't meet in public.

The Dispute Resolution Panels meet in
private in Geneva, Switzerland. Their panels constitute three
to five members in total. The public is forbidden from watching,
listening, or participating in the meetings, the experts on whom
the panels rely for testimony are never publicly named or identified,
and the documents resulting from the meetings are forever sealed
from the public.

p147
Under NAFTA, a corporation can sue a foreign government and can
also force the taxpayers of the defendant nation to pay the corporation
for any profits it might have earned if the nation had not passed
laws that re-

p149
The United Nations Millennium (2000) Report submitted to member
nations and the world by Secretary-General Kofi Annan pointed
out that:

* More than 2.8 billion people, close
to half the world's population, live on less than the equivalent
of $2 per day. More than 1.2 billion people, or about 20 percent
of the world population, live on less than the equivalent of $1
per day.

* More than 1 billion people do not have
access to safe water; some 840 million people go hungry or face
food insecurity.

* About one-third of all children under
the age of 5 suffer from malnutrition.

* The top fifth (20 percent) of the world's
people who live in the highest income countries have access to
86 percent of world gross domestic product (GDP). The bottom fifth,
in the poorest countries, has about one percent.

* The assets of the world's three richest
men exceed the combined gross domestic products of the world's
48 poorest countries.

* In 1998, for every $1 that the developing
world received in grants, it spent $13 on debt repayment.

p152
GLOBALISM DRIVES A PERMANENT DEFENSE INDUSTRY

In the novel 1984 by George Orwell, the
way a seemingly democratic president kept his nation in a continual
state of repression was by having a continuous war. The lesson
wasn't lost on Richard Nixon, who, some suggest, extended the
Vietnam war specifically so it would run over an election cycle,
knowing that a wartime president's party is more likely to be
reelected and has more power than a president in peacetime.

As he was leaving office, the old warrior
president Dwight D. Eisenhower, had looked back over his years
as President and as a General and Supreme Commander of the Allied
Forces in France during World War II, and noted that the Cold
War had brought a new, Orwellian type of war to the American landscape-a
perpetual war supported by a perpetual war industry.

"Our military organization today
bears little relation to that known by any of my predecessors
in peacetime, or indeed by the fighting men of World War II or
Korea," Eisenhower said. "Until the latest of our world
conflicts, the United States had no armaments industry. American
makers of plowshares could, with time and as required, make swords
as well. But now we can no longer risk emergency improvisation
of national defense; we have been compelled to create a permanent
armaments industry of vast proportions. Added to this, three and
a half million men and women are directly engaged in the defense
establishment. We annually spend on military security more than
the net income of all United States corporations."

Nonetheless, Eisenhower added, "This
conjunction of an immense military establishment and a large arms
industry is new in the American experience. The total influence-economic,
political, even spiritual-is felt in every city, every State house,
every office of the Federal government. We recognize the imperative
need for this development. Yet we must not fail to comprehend
its grave implications. Our toil, resources, and livelihood are
all involved; so is the very structure of our society.

"In the councils of government, we
must guard against the acquisition of unwarranted influence, whether
sought or unsought, by the military-industrial complex. The potential
for the disastrous rise of misplaced power exists and will persist.

"We must never let the weight of
this combination endanger our liberties or democratic processes.
We should take nothing for granted. Only an alert and knowledgeable
citizenry can compel the proper meshing of the . / huge industrial
and military machinery of defense with our peaceful methods and
goals, so that security and liberty may prosper together."

p153
WAR PROFITS FOR THE LARGEST TRANS NATIONAL CORPORATIONS

War has become big business in America,
and we're now not only a big user of military equipment, we sell
it to the world: We're the world's largest exporter of weapons
of virtually all sizes and types. While some consider the U. S.
defense budget excessive, others argue that we live in a dangerous
world and a strong military is necessary. After all, there are
sociopaths and psychopaths out there, and sometimes they rise
to the highest levels of power with nations and threaten life
and liberty around the world.

But in a nation where the political process
is more strongly influenced by the profit value than by human
and life-based values-where corporations have human rights but
not human vulnerabilities-Eisenhower's warning becomes more of
a concern.

Military spending is the least effective
way to help, stimulate, or sustain an economy for a very simple
reason: Military products are used once and destroyed.

When a government uses taxpayer money
to build a bridge or highway or hospital, that investment will
be used for decades, perhaps centuries, and will continue to fuel
economic activity throughout its lifetime. But when taxpayer dollars
are used to build a bomb or a bullet, that military hardware will
be used once and then vanish. As it vanishes, so does the wealth
it represented, never to be recovered.

As Eisenhower said in an April 1953 speech,
"Every gun that is made, every warship inched, every rocket
fired, signifies, in the final sense, a theft from those who hunger
and are not fed, those who are cold and are not clothed. The world
in arms is not spending money alone. It is spending the wealth
of its laborers, the genius of its scientists, the hopes of its
children."

It was a brilliant articulation of human
needs in a world increasingly dominated by nonbreathing entities
whose values were not human values. But it was a call unheeded
and today, it is nearly totally forgotten.

Meanwhile, the ruling elites of the Third
World, aligned with transnational corporations, generally become
richer and more well-armed as their people become poorer. The
world, in part as a result of the notion contained in the Santa
Clara ruling-that corporations have the rights of persons-is becoming
more unequal day by day.